Led by the EU’s main shoe-producing members (Italy, Spain, France and Poland), the European Union has accused the governments of the two Asian nations of unfairly subsidising their low-cost shoemakers.
The EU first imposed duties in 2006 for two years claiming unfair competition. This was renewed in October of last year but, pending a review by the European Commission, tariffs should end on 3 January.
For Jerry Shum, investor relations director at Yue Yuen Industrial, the world's largest producer of athletic and casual footwear and a supplier to brands such as Nike, Adidas and Puma, the extension would jack up costs. “For the sake of free-trade spirit, the anti-dumping duty should be removed,” he pleaded.
Analysts note that this is more than a question of costs; for them a trade war is underway between manufacturers, each seeking the support of their respective government at a time of tough times. For instance, the Federation of Hong Kong Industries estimated that 10 per cent of the 70,000 Hong Kong factories on the mainland had to shut down this year because of the troubled economy.
But Asian manufacturers are not alone; the European Footwear Alliance, which represents retailers such as Nike, Adidas and Timberland, have contested the EU move as well since much of their production has been moved to places like China and Vietnam.
According to the Alliance, it paid about € 800 million (US$ 1.18 billion) in anti-dumping duties in the past 3-1/2 years and has failed to see who has benefited.
“Prices have increased by on average at least 10 per cent since the imposition of the duties in 2006,” the Alliance said in a statement.
The issue is also much debated across the 27-nation EU because non-footwear producing members are favourable to cheap Chinese imports.
A decision must be made by November 20 at the latest.